A Financial History of Cooper Union
A “Desperate State of Affairs”
Even without the polytechnic, finances were a struggle. Philanthropy wasn’t forthcoming beyond the founding family and its friends. Family members stepped in to cover deficits and unforeseen expenses. Peter Cooper’s children paid for repairs to the Foundation Building in 1884 and the addition of the seventh floor in 1892. Gifts also were received from the children of William Cooper, Peter’s brother.
“It is a startling fact”, wrote Humphreys, “that in the 67 years between 1859 and 1926 there were 33 deficit years – in effect, in one year out of every two, the income was insufficient to meet the expenses. (Only the marked increase of the return on the Lexington Avenue property provided a breathing spell for this desperate state of affairs.)”
A reliance on the family and its circles (including Wilson Hunt, a trustee and donor) to cover operating shortfalls made for an implicit financial model in which periodic gifts were used to plug budget gaps, often at the expense of building up an endowment that could sustain the institution into the future. Humphreys describes a bill that was paid by Peter Cooper’s children “with money originally scheduled to increase their father’s endowment”.[i]
Peter Cooper had planned the Foundation Building to house stores (hence the archways on the east and west sides, which were the store fronts), whose owners would pay rent to the institution. He persuaded the New York State Legislature to grant the new institution a tax exemption from the rental income from those shops, as well as from “all endowments at any time to be made”,[ii] on the condition that the proceeds would be used toward the uses, intents and purposes enumerated in the Charter.[iii]
Critics accused him of using his institution as cover for a tax exemption for a commercial enterprise.[iv] He responded by inviting critics to see the wonderful work being done on the upper floors, which was supported by the rental income on the ground floor. He also made sure that rental revenue was handled directly by the corporation and not by him.
[i] Richard F. Humphreys, “To Correct a Prevailing Impression…”, At Cooper Union, 1964 (Fall).
[ii] Chapter 297 of the Laws of 1859, New York State.
[iii] op. cit., Charter
[iv] Edward C. Mack, Peter Cooper, Citizen of New York. Duell, Sloan and Pearce, 1949.